New CU Serves Skeptics

When it began operations and went online last week, the first and maybe only federal credit union in the nation with a part-time competitive rodeo rider as a manager opened its doors.

The brand new Lacota Federal Credit Union is the only financial institution serving the residents of the more than 3,400 square miles of the Pine Ridge Native American Reservation in South Dakota, one of the poorest in the nation.

The new credit union, which has already been granted a low-income designation, will begin by taking deposits and offering a limited range of loans, including auto loans capped at no more than $5,000.

“That’s enough money for the kinds of cars that people drive around here,” said Whitney O’Rourke, LFCU’s new manager. “This a pretty low income area.”

Lakota FCU is sponsored by a community development financial institution, the Lakota Funds, and will have potential field of membership of over 40,000 people, O’Rourke said. O’Rourke has worked Lakota Funds since 2010 when the organization’s long-held ideal of a credit union began to move toward reality.

O’Rourke, who is herself Lakota and who grew up on a ranch near the small town of Interior, South Dakota, made it through community college on a rodeo scholarship before earning an economics degree at South Dakota State University in Brookings. She used her degree to launch a career specializing in financial services issues among the Lakota and on reservations. She still rides in roping and barrel racing rodeo events, she said.

Only 40,000 people, for example, live on Pine Ridge’s thousands of miles of territory and of those 35% are under the age of 18. And many residents have remained very suspicious of financial institutions, particularly those which have not been owned by reservation residents or even other Native Americans.

The combination of suspicion of financial institutions and low population has tended to mean that reservations residents have either been forced to use higher fee alternative financial institutions, such as check cashers or financial institutions off the reservations, which have also tended to charge high fees, O’Rourke explained. There simply has not been the perceived demand on the reservation to support a for-profit bank, she said.

The ability to cash checks for no fee or much lower fees should make the notion of LFCU as a depository an easier sell, but O’Rourke said that over the years a cash only culture has developed that the credit union will need to overcome.

“People need to get used to the idea that they can put their money in the credit union and still have access to it without having it at home or on their persons,” she said.

One way the credit union is helping people make that transition is by offering debit cards instead of the traditional checking accounts. Checking accounts carry a stigma with many people because of their fees, O’Rourke explained.